What to do about our roads and bridges?

Thursday

Mar 28, 2013 at 3:15 AM

There is a political tussle going on, at present, to move public opinion in favor of, or in opposition to, HB617. This is a bill that seeks to raise the NH gas tax, in increments over a four-year period, by a total of 15 cents, with the accruing revenues earmarked to pay for the cost of fixing the state’s ever-increasing number of crumbling roads and failing bridges.

The bill received unanimous support from the House Public Works and Highways Committee, was passed by the House with a bigger than expected margin, and now sits with the Ways and Means Committee.

Proponents of the bill point out that there has not been a gas tax increase in over 20 years, while the cost of construction and repair materials like asphalt has soared. They note that New Hampshire currently has the lowest gas tax in the northeast region, and maintain that without the extra cash to allow state roads and bridges to be fixed, and cities and towns given help to fix their decaying transportation infrastructure, the state, as a whole, will suffer competitively. An e-mail currently circulating from Concord, also asserts that the bill will fund 1,000 construction jobs, and get the state back onto an 8-10 year paving cycle.

Opponents of the bill, as typified by Americans for Prosperity-New Hampshire, call the gas tax increase “massive,” “outrageous” and “unwarranted,” “a crushing blow to our families” and a bill that will destroy jobs. Accordingly, AFP-NH has launched an online petition asking people to register their opposition to the hike.

There is no doubt that the high cost of gas is having a negative impact on the economy of the entire country, and an AP story (with no writer credited) this week noted that although the U.S. is increasing oil production at a record rate, and while demand is dropping, prices remain high at the pump, as well as for home heating oil. Quoting an unnamed “expert” (something responsible newspapers don’t normally do), the AP writer put the blame squarely on increased demand in China.

Common sense would indicate that increased world demand for oil is a factor, but how much of a one is at issue. In the past, wire service stories have blamed rising gas prices on kidnapped oil workers in Nigeria, drilling platforms going off line in the Gulf as bad weather approaches, and refineries closing down for maintenance. When these issues get resolved, the price doesn’t seem to come down again.

Less than a year ago, folks in the know — the Petroleum Marketers Association of America (PMAA) and the New England Fuel Institute (NEFI) — made public they have a different set of suspects: oil market manipulators and speculators.

“On behalf of our members and their consumers,” they wrote, “we applaud the President for his statement regarding the need to step-up efforts to address the harmful effects of excessive speculation in the energy commodity markets. His statements are long overdue and are encouraging considering the harmful effect that unchecked financial activities have had on businesses, consumers and the broader economy.”

“We agree with the President,” they continued, “on the need to step-up oversight of the energy futures and swaps markets, fully fund the CFTC (Commodity Futures Trading Commission) to put the cops back on the beat and increase the penalties for market manipulation.”

We wonder if Wall Street and the traders at the Chicago Mercantile Exchange batted an eyelid at that salvo, for in the months since then little has changed for working people buying gas to get to work and go grocery shopping. Indeed, some people believe that high gas prices suit the President’s “green” agenda because wind and solar power becomes more competitive.

Just a couple of weeks ago, the high price of gas was the subject of a discussion on the respected Kudlow Report on CNBC. During the segment, Kudlow’s guest mentioned that refiners used to get $7 for every barrel of oil (42 gallons) they refined, but that this was now $40. (We would ask readers to do their own research rather than accept this number outright, for the oil market is extremely complex and facts hard to verify.)

If this were true, the current market price for West Texas Intermediate Crude along with the refinery charge, could arguably account for over $3.10 of the price of a gallon at the pump, with the remainder being distribution costs, federal and state tax and a few cents of profit left for the gas station owner.

All this makes life the more difficult for New Hampshire decision makers, struggling with the gas tax hike issue. No one seems to argue that many roads are in a state of decay and that red list bridges, those with serious structural faults, are numbered in the hundreds. They must be fixed — and the main source of revenue to do so is the gas tax — or the state will start to resemble Appalachia.

We note that one of the gas tax opponents mentioned above, Americans for Prosperity, is chaired by David Koch, vice president of Koch Industries, a major private company with oil refineries and a pipeline distribution network. A billionaire and noted philanthropist, Mr. Koch perhaps could be approached to fix our roads and bridges, and the gas tax could be waived.